Jason Peatz – Mortgage Associate

Finance Minister Announcement

February 16, 2010 1:04 pm Jason Employed Persons, First Time Home Buyer, Interest Rates, Mortgage Insurance, Rental

As I am sure that you have heard the Finance Minister of Canada has decided to make some adjustments to the lending requirements.

The following is a link to the official press release - http://www.fin.gc.ca/n10/10-011-eng.asp

The most important points are below.

Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.

Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.

Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.

I believe that the industry has a number of clarification questions that we need answered before we fully understand how this will affect the market place this spring.

When everything is all sussed out I will be sure to update you.